China, Canada reach deals on oil, uranium and air travel

Jason Fekete, Postmedia News02.09.2012

Chinese Premier Wen Jiabao invites Prime Minister Stephen Harper to view Chinese military honour guard earlier this week as Harper began a four-day trip to the Asian superpower. The two countries have signed billions of dollars in agreements during the trip so far.

BEIJING — China and Canada declared Thursday that bilateral relations have reached "a new level" following a series of multibillion-dollar trade and business agreements to ship additional Canadian petroleum, uranium and other products to the Asian superpower.

Prime Minister Stephen Harper and the Chinese leadership said Thursday their new energy and economic co-operation agreements — as well as billions of dollars of private-sector deals — signed by the two countries over the past few days are unprecedented and will only open the door to additional trade and investment.

The two sides are also finalizing details on China loaning a pair of bamboo-munching giant pandas to zoos in Toronto and Calgary for a period of five years each, with more details expected this weekend.

The new trade deals further solidify a "strategic" partnership between the two countries, particularly on natural resources, with China's top political leaders calling for "more large-scale co-operation" with Canada on oil and gas to feed its seemingly insatiable energy appetite.

Harper announced Thursday, following bilateral meetings with Chinese President Hu Jintao and Vice-Premier Li Keqiang, that the two partners have struck an agreement that will allow Canadian uranium companies to "substantially increase exports to China" to help the world's most populous country meet its growing need for nuclear power.

Canada and China have also agreed that a joint complementary economic study being conducted will be completed by May 2012, "after which Canada and China will proceed to exploratory discussions on deepening trade and economic relations."

China's political leaders say they're interested in exploring the feasibility of a full free-trade agreement.

It follows up their announcement Wednesday that negotiations have concluded on a foreign investment protection agreement that's nearly 20 years in the making, but still faces a legal review and ratification before it becomes law.

"The cumulative impact of these accords truly takes Canada-China relations to a new level," Harper told corporate leaders from both countries gathered in Beijing for the fifth Canada-China Business Forum.

The prime minister will continue his four-day China trade mission with a stop in Guangzhou on Friday for a keynote speech to another business audience. On Saturday, he'll head to the southwestern metropolis of Chongqing to visit a panda preservation centre and provide more information on China loaning a pair of giant pandas to zoos in Calgary and Toronto over the course of a decade.

Harper won praise from the Chinese president during their bilateral meeting for his commitment to the Sino-Canadian relationship.

"Mr. prime minister, you put a lot of value on Canada's relationship with China and are strongly committed to promoting the practical co-operation between our two countries. I appreciate your efforts," Hu said through a translator. "I believe your visit will go a long way to promote the growth of the strategic partnership between China and Canada."

The two governments on Thursday also announced an expansion of an air transport agreement they hope will increase the flow of people and goods between Canada and China, as well as provide additional flight options and lower fares.

The protocol to ship additional uranium to China is a legally binding agreement that supplements a 1994 pact between both sides for peaceful uses of nuclear energy.

It meets Canada's nuclear non-proliferation policies and obligations, the federal government said, and "will ensure that Canadian supplied uranium is being used in China's nuclear program strictly for peaceful, civilian purposes."

The prime minister also announced during his speech to the business forum that more than 20 commercial agreements — valued at close to $3 billion and involving nearly 50 Canadian and Chinese companies — have been signed during the trade mission to the Middle Kingdom.

"We expect to see similar success stories in Canadian energy exports to China, once infrastructure is in place."

Harper has said building pipelines to the West Coast — such as the proposed Enbridge Northern Gateway oilsands pipeline and a separate one for liquefied natural gas — is a national priority as Canada looks to ship its vast resources to Asia.

Enbridge CEO Pat Daniel said the commitment by the Chinese and Canadian governments for a strategic energy partnership will allow Canada to diversify its oil-and-gas export markets beyond the United States and enable China to broaden its supply base.

"The potential is huge," said Daniel, who has joined Harper in China for the trade mission. "The most important thing is a greater commitment from the Canadian government to broaden out markets for Canadian energy."

Some of the major trade deals signed Thursday feature Canadian corporate titans, such as commuter train manufacturer Bombardier, which has won contracts to supply rail cars and other technological expertise to Chinese public transit systems.

Telus and Bell, two of Canada's telecommunications giants, signed deals to upgrade their networks with equipment purchased from a major Chinese manufacturer.

Also, Canaccord Financial and the Export-Import Bank of China announced their plans to establish a $1-billion U.S. fund dedicated to investing in Canadian natural resources.

Peter Kruyt, chairman of the Canada China Business Council, argued the large number of corporate deals struck in Beijing happened because of the prime minister's trade mission.

"He makes a huge difference. It's probably not the case in other countries trying to do business with Canada," Kruyt told reporters. "But in China, if the leadership has a relationship at the top levels, it trickles down."

Certainly, China is looking for more oil and gas from Canada, with Chinese vice-premier Li saying Thursday his country wants to increase imports of energy and natural resources from Canada.

State-owned Chinese oil and gas firms have invested more than $10 billion into Alberta's oilsands and B.C. shale gas plays over the past couple of years alone, and the two partners expect the trend will continue.

OPTIONAL TRIM

"Canada is one of the countries with a deep energy and resource reserve. China, meanwhile, is a large and stable market," Li, through a translator, told the business forum. He called for "more large-scale co-operation" on petroleum and minerals.

"Never before has Canada-China business co-operation been so deep-based and wide ranging," Li added.

The Chinese leadership is also pushing for the early signing and ratification of the Foreign Investment Promotion and Protection Agreement (FIPA), with Premier Wen Jiabao encouraging the two sides to further explore the feasibility of a full free-trade agreement.

While the FIPA could be ratified within months, it has taken 18 years to conclude negotiations, so it doesn't appear a full free-trade deal is anywhere on the horizon.

"Let's not get ahead of ourselves here," International Trade Minister Ed Fast, who's in China with Harper, said when asked about Chinese calls to explore a possible free-trade agreement.

jfekete@postmedia.com

Twitter.com/jasonfekete

Comments

We encourage all readers to share their views on our articles and blog posts. We are committed to maintaining a lively but civil forum for discussion, so we ask you to avoid personal attacks, and please keep your comments relevant and respectful. If you encounter a comment that is abusive, click the "X" in the upper right corner of the comment box to report spam or abuse. We are using Facebook commenting. Visit our FAQ page for more information.

Share

China, Canada reach deals on oil, uranium and air travel

Video

Today's News

Best of Postmedia

The mystery of Malaysian Airlines Flight 370 has captivated the world for more than four years, but for two retired Ottawa air accident investigators, it all comes down to six seconds. And the evidence from those final moments before the Boeing 777 disappeared into the Indian Ocean is irrefutable, say Larry Vance and Terry Heaslip. “We […]

At first she was tearful, then she was horrified. The young woman had just discovered a cellphone that was recording her as she took her clothes off in an Ottawa doctor’s examining room. Confronted, the doctor insisted that the video was for “training purposes” and deleted it in front of her. Incredulous, she refused to […]

Almost Done!

Postmedia wants to improve your reading experience as well as share the best deals and promotions from our advertisers with you. The information below will be used to optimize the content and make ads across the network more relevant to you. You can always change the information you share with us by editing your profile.

By clicking "Create Account", I hearby grant permission to Postmedia to use my account information to create my account.

I also accept and agree to be bound by Postmedia's Terms and Conditions with respect to my use of the Site and I have read and understand Postmedia's Privacy Statement. I consent to the collection, use, maintenance, and disclosure of my information in accordance with the Postmedia's Privacy Policy.

Postmedia wants to improve your reading experience as well as share the best deals and promotions from our advertisers with you. The information below will be used to optimize the content and make ads across the network more relevant to you. You can always change the information you share with us by editing your profile.

By clicking "Create Account", I hearby grant permission to Postmedia to use my account information to create my account.

I also accept and agree to be bound by Postmedia's Terms and Conditions with respect to my use of the Site and I have read and understand Postmedia's Privacy Statement. I consent to the collection, use, maintenance, and disclosure of my information in accordance with the Postmedia's Privacy Policy.